Rich tax avoiders are sitting back and laughing

Vanguard June 2014 p. 10
Nick G.

The former Business Council of Australia (BCA) president Tony Shepherd’s Audit Commission revealed the agenda that local and foreign corporations are pursuing through the Abbott Government.

Through a manufactured “budget crisis” they are putting the squeeze on working Australians.

The same BCA knows very well that its corporate membership is engaging in massive tax avoidance.

Towards the end of last month they co-hosted with legal firm Clayton Utz a seminar on the OECD and G20 decision to try and restrict base erosion and profit shifting loopholes that have scandalised Europe with revelations that giants like Amazon Books and Google have paid next to nothing on huge profits in countries like the UK.

The seminar was told by Tax Office officials that 233 multinationals in Australia were “under review” and had collectively sent around $60 billion to related parties in tax havens outside this country in 2012.

That money, if taxed at the company tax rate in Australia, would provide revenue to the government that would allow it to fund social programs rather than cut them.

One of the mechanisms for avoiding tax on these billions of dollars was for a company to register a trading hub in a tax haven, transfer to it the Australian company’s intellectual property rights, and then have the hub “charge” the Australian company for use of those rights.

Massive untaxed profits, exit stage right.

Reports from the seminar suggest that rather than chastising themselves for this dishonesty, business participants sought assurances that sections of the transfer-pricing legislation introduced by the Labor government when it held office would not be used to try to recover these untaxed profits.

The Deputy Tax Commissioner Mark Konza assured business that the tax commissioner would not “go crazy with this power”.  In fact, he said, the powers would be “rarely implemented” because of associated legal difficulties.

Big business was further assured that Abbott’s decision to slash 3000 jobs at the Tax Office would probably hamper what little effort the ATO may have been planning to put into the task.

At around the same time, it was revealed that the number of superannuation clients with funds of more than $5 million had increased by 76 percent in the past three years, and those with over $10 million in super had doubled, reflecting the increasing numbers of super-rich living off our work.

Given the tax breaks and concessions associated with super funds, the super-rich are able to receive income (returns on investments made with their money by super funds) on which they pay zero to 15 percent tax, instead of the current top rate of 46.5 percent.

These disclosures prove once again that there is no basis for budget “crisis” warnings.

The problem is not that there is insufficient money in this country to provide for the government’s revenue.

The problem is that there is too much, and it’s in the hands of corporations and individuals who can use profit-shifting and superannuation to laugh at the rest of us mug taxpayers.

These social parasites are past their use-by date.

Their unfairness and arrogance are intolerable.

We can and will intensify our efforts to get rid of them.

..................

Further reading:  Westfield pays less than 8 cents in the dollar, cheating the tax office of $2.6 billion. See:

http://bit.ly/1rilfNB  

Australia's rich hiding billions from Tax Office:  http://www.theguardian.com/world/2014/jun/04/australias-richest-could-be-hiding-billions-from-tax-office

Abbott's latest tax changes only make corporate tax avoidance easier:

http://www.thesaturdaypaper.com.au/news/politics/2014/06/07/the-buried-treasures-corporate-tax-avoidance/1402063200#.U5O4RCo3zKo

   

Aurizon: Privatisation disastrous for workers

Vanguard June 2014 p. 11
Duncan B.

The privatisation of Government-owned enterprises has resulted in higher prices, poorer service to customers, massive profits to the new owners and obscene salaries paid to their executives.

Workers have suffered job cuts and worsened conditions after privatisation of their enterprise.

An example of this is the rail transport operator Aurizon. This company was formed from the privatisation of Queensland Rail in 2010. Since then, Aurizon has got rid of more than 2000 jobs.

Now the company is seeking to get rid of a further 480 maintenance staff from its workshops at Redbank near Brisbane, and at Townsville.

Aurizon workers are considering industrial action after the company approached Fair Work Australia to terminate 14 enterprise bargaining agreements dating from when it was still a government-owned company.

(Above: 130 Redbank workers responded angrily last October to demands by Aurizon that they move to Rockhampton or lose their jobs.) 

The agreements prevent Aurizon from making forced redundancies and relocations and from taking away employees’ free rail travel.

The company claimed that “these agreements are placing significant and unreasonable restrictions on the company that impact on efficiency, productivity and customer service, as well as imposing additional costs on the business.”

Aurizon is in a strong financial position and is making record profits. Aurizon’s chief executive Lance Hockridge earned $4.5 million, including benefits, during the 2012-2013 financial year.

Meanwhile, Aurizon’s main rival Pacific National (itself formed from the privatisation of the Federal Government-owned National Rail and the Victorian and NSW Government freight rail companies) is also seeking to reduce staff numbers through redundancies in New South Wales due to a down turn in grain haulage. They are looking to get rid of about 70 train drivers in NSW. Forced redundancies have already occurred.

This is on top of redundancies taking place in operating staff and management due to restructuring of Pacific National’s rail divisions.

Concerns about privatisation of Port of Melbourne

The Victorian government has decided to sell the Port of Melbourne, by offering a medium-term lease to prospective purchasers. Already, foreign-owned companies including Hong Kong-based Hutchinson Port Holdings have expressed interest in buying the port.

The sale of the Port of Melbourne to a foreign buyer does not require approval from the Foreign Investment Review Board as the port is owned by the state government!

Farm and industry groups are worried that as the port reaches capacity within the next ten years, a foreign buyer could restrict access and force prices up.

Aged care workers fight cuts to working hours and onerous workloads

Vanguard June 2014 p. 10
Contributed

(Above: courtesy simonkneebone.com )

Aged care workers across the country are fighting cuts to hours and onerous workloads.

 Hours of work allocated for delivery of personal care and support services such as cleaning and food for residents have been highly dependent on federal government funding. This funding is for ‘operational needs’. Funding for the building and expansion of aged care facilities comes mainly from bonds up to $550,000 paid by residents when they enter the aged care facility.

Since the mid-1990s federal government funding for operational needs of aged care providers has been outcome based. The timid regulation of staff to resident ratios as a condition of government funding that existed prior to the mid-1990s was abandoned by both Labor and Liberal Governments as ‘self-regulation’ by employers and ‘the market’ extended even in to aged care. Aged care providers were able to determine their own staff to resident ratios and how many labour hours of care they allocated to residents.

By 2014, the average number of hours of care per resident per day has steadily declined to 2.96 hours. Aged care providers are categorised as ‘private for profit’ and ‘charitable’. The large private for profit providers in the industry have led the charge to the new industry ‘benchmark’ of 2.96 hours of care per resident per day by reducing hours of staff and increasing their workloads.

Some of the ‘charitable’ providers, mostly owned by church groups such as Anglicare and Uniting Church, have resisted the race to the bottom and maintained levels of care at as much as an average of 3.75 hours per resident per day.

Abbott government accelerates race to the bottom

However the Abbott Government has accelerated the race to the bottom regarding hours of care for residents by reducing the amount of government funding for ‘operational needs’ over the coming financial year and the next decade.

The government is setting up a ‘user pays’ system whereby an increasing amount of money to fund even the disgraceful ‘benchmark’ of 2.96 hours of care per resident per day must be paid by the residents themselves.

Consequently many charitable providers are now trying to implement cuts to staffing hours with devastating impacts on both staff income and workloads.

This is being strongly resisted by staff who are not only concerned about the reduction in the weekly incomes but also stressed by their inability to provide the care residents need in the working hours they are provided. Personal care staff represented by United Voice, HSU and AN & MF unions are demanding staff to resident ratios and security of hours of work provisions in enterprise bargaining negotiations.

They are also finding growing support from families of residents who can see when they visit their loved ones the day to day impact on the quality of care as staff are stretched to the limit.

When aged care providers try to reduce staffing hours now, they are confronted by angry people on two fronts – staff and residents.

So far the providers have been able to weather the storm by blaming (correctly so to a large extent) the federal government and saying that their hands are tied. However this argument is wearing thin and the time is coming where staff, with the support of families of residents, will be taking joint action.

Resistance has occurred for a while in an individualistic way with many staff leaving the industry altogether, and an increase in outbursts of anger towards providers by frustrated and desperate family members.

However many staff cannot afford to leave as jobs become scarce elsewhere, and because they do not want to ‘abandon’ the residents for whom they genuinely care. Similarly, angry family members of residents have not got any real option of moving their loved one to another provider where the same type of problem is likely to exist.

The long term solution for the aged care staff and the industry as a whole is for the industry to be owned by the people as part of a national public health system. In the short to medium term, working hours and workloads of aged care staff will only improve with an industry wide campaign by unions and communities for more funding of hours of care as a condition of government funding to aged care providers.

The Audit Commission's reports are orders from finance capitalism

Vanguard June 2014 p. 4
Max O.

Like Dracula getting hold of the blood bank, the Audit Commission's report is a plan of blatant theft by finance capital of public welfare and property! The 'Age of Entitlement' for capital is expanding into an era of austerity for the Australian working class.

The commission's 86 recommendations aim at dismantling the Medicare health scheme, abandoning pension, disability, family, child care, unemployment and other welfare entitlements. Other targets include social programs, such as assistance for the homeless, with education and tertiary students also suffering increased fees through the deregulation of the university system.

Tony Shepherd, the Audit chairman and the Business Council's prize-fighter, spins the reactionary time-worn argument in the commission's report: “In recent years, Commonwealth spending has outpaced revenue collections ... This is the sixth consecutive budget deficit. We have spent beyond our means for too long...”

The report, as determined by the its terms of reference, only considers government spending and not income in examining the budget debt and consequently is nothing more than a class attack on workers and the poor. As required by finance capital it is about reducing government's role in providing welfare.

The plan of attack

The key recommendations require the demolition of essential services:

• Compel a $15 co-payment for doctor and hospital emergency visits; severe cuts to subsidised medicines and medical services; and deep cuts in funding public hospitals. This heralds the beginning of the end to the Medicare health system.

• Place a ceiling on funding schools at 2017 level; handover all the financial responsibility  for education to the states; cease commonwealth funding for vocational training and education; raise fees for tertiary education by a third to cover 55% of costs. 'User pays' privately run education increasingly replaces a free publicly funded education system.

• Lift the retirement age to 70 by 2035; means test the value of the family home for pensions; index pensions to average weekly earnings rather than to male average weekly earnings; and seniors health concession cards be further restricted. This is a significant step in ridding government of this signature welfare provision.

• Eliminate or reduce eligibility for family tax benefits for parents who don't work; and childcare benefits be means-tested; do away with or cap Abbott's paid parental leave at average weekly earnings.

• Privatise government bodies such as the Centrelink, Snowy Hydro, Australia Post, Australian Hearing Service, Australian Rail Track Corporation and NBN Co. These sell-offs and closures would see around 15,000 public service jobs done away with.

If this is not bad enough the Audit Commission really bares its fangs, going outside its terms of reference, by calling for a 12% cut ($150 a week by 2033) to the already miserable minimum wage. It also wants a 12 month loss of the dole for unemployed young workers if they are unwilling to move to areas where there is available work.

The report asserts that Australia has a "high by international standards" minimum wage. It urges a cut of 1% a year for a decade until the minimum wage bottoms out at 44% of national weekly earnings.

The Audit Commission's intention, on behalf of finance capital, is quite clear and that is to make Australian workers a low wage work force. Whether it is wages, conditions or welfare rights they are determined by the comparative might of the contending classes, and the ruling class presently feels emboldened to make wretches of the Australian people.

A ferocious attack has been launched by corporate and finance capital against our working class. It can only be overcome with widespread and co-ordinated resistance by workers and its allies.

Federal budget dismantles welfare rights, hands over government finance to corporations

Vanguard June 2014 p. 3
Max O.

 

In line with the trend throughout the Western capitalist world, the Hockey Abbott budget is implementing the demands of international finance capital by tearing down the poor and workers welfare rights, as well as the nation-wrecking sell-off of government assets. Using the spin, that readers have become all to familiar with, ('end of the age of entitlement', 'pain with purpose', 'nation of lifters not leaners') the government has used a manufactured 'debt crisis'  to justify the enormous cutbacks to government welfare and vital public institutions.

The real purpose of the budget cuts is to shift billions of dollars over the next couple of years from the less well off to the wealthy, large corporations and financial institutions. It will also have an ideological function of instilling fear and misery into the poor and working class.

Hockey's budget announcements, in the main coming straight from the Business Council's and Audit Commission's wish list, amount to the following:

• Will now prevent people who are aged 30 or younger from getting Newstart (unemployment benefits) unless they’ve done an “employment services activity” for six months. The under 25 will have to scrape by on the pitiful Youth Allowance because they're no longer be eligible for Newstart.

• The pension age to be increased to 70 by 2035. From 2017 the age pension and the disability support pension will be indexed to inflation, rather than average weekly earnings and so fall behind the cost of living.

• Family payments are to be cutback by $8 billion!

• Sole parents and stay at home parents are to be penalised. Parents (essentially women) with children over the age of six, with no regard to their circumstances, will be pushed and poked back into work.

• Through the use of co-payments Hockey has attacked the universal nature of Medicare. The sick will be hit with a $7 charge to see their GP, or get a pathology test and for X rays. There will be a $5 increase to the cost of every single prescription drug. This in effect is double dipping with the 'user pay' philosophy, because people already pay for their Medicare through the 1.5% tax levy.

• Reintroduction of the six monthly fuel excise indexation that will raise $2.2 billion. This will go to fund road infrastructure, with public transport being overlooked. In fact there’s plenty of handouts to the construction companies and property developers, with $12 billion from the government thrown their way to build infrastructure for the benefit of big business - more and bigger polluting roads (like Melbourne’s East West link), ports, railways and airports.

• University funding will suffer a massive cut, but Hockey will now allow vice chancellors to charge students whatever fees they like. Government contributions to HECS will shrink and repayments will start earlier and at a higher rate.

• Over the next decade the budget tears out $80bn funding to the states for hospitals and schools. This is an arrant attempt by Hockey and Abbott to push the states into agreeing to increase the unpopular GST. The Coalition have now blatantly reneged on the promised Gonski funding, aggravating the widening gap between private and public schools.

• A deficit tax will be levied for three years of 2% on incomes of over $180,000. This to feign the impression that all (rich and poor alike) must share the burden of the debt crisis, and predictably was disapproved by the likes of Tony Shepherd from the Audit Commission and Business Council.

• To make co-payments more palatable finance raised from them will go to a dubious Medical Research Future Fund, which will receive $20 billion by 2020.

• Company tax to be reduced down to 28.5%, a 1.5% reduction.

• $10,000 subsidy over 24 months for businesses who employ over 50s.

There is money to be had but it is in the wrong hands. Governments could quite easily redress their revenue problems by making the RICH PAY! For example a proper Super Profit Mining Tax of 40% on all minerals, with a fixed state royalty and a change to depreciation would collect $35 billion straight away.

They could also look at permanent options like trusts, superannuation tax concessions and negative gearing. The forgone tax revenue cost the budget this year $34 billion rising to over $50 billion in 2016/17.

Let’s not forget the deceitful scheme of profit shifting to tax havens by multinational corporations.  This is wealth produced from workers’ labour power that is sneaked out of the country instead of being used here to fund social programs.

But of course this won't happen, because our 'parliamentary democracy' is in fact a covert capitalist dictatorship, a social and economic system that only exists to serve the needs of capital accumulation/profiteering for Australia's comprador capitalist class.

The Abbott Coalition government have just started stage one of their austerity attacks. Following stages will include increasing and extending the Goods and Services Tax (which hurt the poor and workers), more nation-wrecking privatisation and further outsourcing of public sector services, and vicious attacks on minimum wages and worker rights.

By now many people don't have faith in parliamentary parties and are beginning to lose faith in parliament itself because of its perpetual service to capitalism and the continual neglect of their needs. Resistance to this budget and other attacks on the working class can best be sustained through workplace and community based organisation.

Mass/participatory democracy is the weapon that ordinary people can use in their workplace, suburbs and the streets to start the fightback against this budget and parliament that has declared class war on them.

The art of enforcing Capital's regimes

Vanguard June 2014 p. 5
Nick G

Artists participating in the Sydney Biennale stacked on a blue recently when it was announced that Transfield Holdings subsidiary, Transfield Services, had won a $1.2 billion contract to manage the Manus Island concentration camp.

Reflecting community outrage over the policy of offshore detention and the murder of Reza Barati, the artists have forced the Biennale board to reject sponsorship from Transfield Holdings.

Luca Belgiorno-Nettis, an executive director at Transfield Holdings, had to resign as chair of the festival.

A bit of Transfield history

Transfield was the creation, in Sydney, of two ex-officers of Mussolini’s fascist army, Franco Belgiorno-Nettis and Carlo Salteri.

Marxist historian Humphrey McQueen quotes Franco Belgiorno-Nettis as saying “The choice of friends, selection of enemies is part of management today.  We camouflage this with a veneer of civilisation”.

Arts sponsorship is one such veneer.

Far from the bloody workplaces where a boss’s deadline all too often becomes the workers’ line of dead, black tie events are held where companies like Transfield use the arts as PR. 

For them, the arts are the camouflage with which they keep concealed their true role as exploiters of labour, despoilers of the environment, and in Transfield’s case, enforcers of government policy.

Writing of the founding days of the company, McQueen records that “Transfield kept its labourers isolated in camps as an anti-strike device.  If they did stop, Transfield closed the camps and refused to readmit their spokesmen.  In May 1962, forty builders labourers on the Vales Point power station struck against having to pay for their board and keep.  Conditions in the Transfield camps were more like the military than a village, the site managers behaving like NCOs.  To break up a stop-work meeting, one foreman threw some labourers into the back of a truck before threatening to drive over the rest.”

McQueen says that exploiting cheap labour rather than investing in capital equipment allowed Transfield to kill off competition.  It also ran the risk of killing off workers, but they are cheaper to replace than heavy equipment.

“Transfield sent men up 200m television towers without safety equipment,” wrote McQueen.  “Its supervisors claimed that protective gear added to the danger by limiting mobility.”

“We didn’t have the cranes,” he quotes a Transfield linesman. “So my mate and me had to carry a channel 10 feet by 4 feet, up 15 feet, position it, which is usually the crane’s job, and then put it together.  On the ground, two men would never do such a thing, but we did it high in the air.  Of course it was dangerous.”

Transfield proud of its legacy

No wonder new Transfield Service’s new chair, Diane Smith-Gander was able to claim of Transfield’s suitability for the Manus Island job that the company “has a 60-year legacy of doing this sort of work in remote locations and difficult conditions.”

Quoted in a puff piece for the Financial Review’s BOSS magazine (yes, that’s its name!) Smith-Gander said “…we have experience in this sort of work”.

Replete with portraits of herself channeling Annie Lennox with a mouth full of lemons. Smith-Gander claims working class ancestry and compassion for the “tens of millions of displaced persons in the world”.

 

But she is also depicted as arbitrary and authoritarian, as someone “quite happy to issue instructions to all and sundry”.

Profits used to paint over reality

The corporate empire that is Transfield has arisen from the theft from its labourers of value created by them after their labour power has covered their wages. 

Maybe they worked three or four hours a day to produce the value that Transfield converts into the price of their labour power, but the remaining four, five or six hours of each day they worked for no pay, creating the value that Transfield redeems as profit realised through payment for completion of a project.

Then those unpaid hours of profit are used by the corporation to sponsor art and to engage in other activities far removed from the actual site of profit creation in order to prettify their operations, to conceal the pressures placed on their employees, to cover over the injuries, the maiming and the deaths that occur in the normal course of their operations.

We honour the Biennale artists who have refused this company’s sponsorship.

And we give the final words to McQueen:

“The next challenge is for all of us to shout NO whenever corporations attempt to patronise art, education, health or sport with the proceeds of their crimes.

“The finest and noblest art forms will be our envisaging the kind of society that we can build as our collective efforts enrich individual creativities.

“Placing the highest moral and aesthetic value on social labour opens pathways to a time when corporate blood money will no longer be a distraction because ‘human being’ and ‘artist’ will again be synonymous.”

Labor: modernisation is beside the point

Vanguard June 2014 p. 8
Nick G.

Labor leader Bill Shorten (above) delivered a speech some weeks ago under the title Towards a modern Labor Party.

The speech presented what purported to be a “vision” of a membership-based and community-based “modern, outward-looking, confident and democratic party”.

Essentially, this turned upon an easier “one-click” online joining model for new members, removal of the requirement that prospective members join a union, removal of the practice of affiliated unions exercising  “factional, centralised decision-making”, giving local members 70% of the say in selecting their local candidate, giving local party members a “meaningful say in the selection of Senate candidates” and redrafting the first chapter of the party’s National Platform which contains its “enduring values”.

How values can be said to be “enduring” when they need to be redrafted was not explained.

A liberal bourgeois party

As for the rest, it really does reflect the direction that one would expect of a liberal bourgeois parliamentary party in the era of the complete domination of industrial capital by international finance capital, of the destruction of manufacturing by the greater attraction to investors of financial speculation, and of the numerical decline of the organised working class and its replacement by both precariously employed and largely unorganised semi-proletarians and service workers.

And perhaps the most frustrating obstacle to a Bill Shorten in his desire to “modernise” the Labor Party is precisely that this party which all along has been a liberal bourgeois party cannot rebrand itself – in this advertising era of continual rebranding of “the image” – as the Liberal Party because the conservative party stole that name nearly seven decades ago and refuses to give it up.

Ties to unions or tying up unions?

There will be some in the organised union movement who will dispute the truth that the Labor Party is a party of capitalism, is a bourgeois liberal party.

“The unions gave birth to the Labor Party,” they will very correctly assert and will point to a succession of Labor leaders who have come up through the ranks of the union movement.  What they dare not admit is that these Labor pollies born of trade union officialdom have been, even in the very earliest days of the ALP, “everywhere the most moderate and ‘capital-serving’ element”, as Lenin observed in 1913.

Shorten is living proof that there has been no “modernising” of that aspect of the Labor Party.

A party of capitalism

Some will try to argue that the ALP is a social-democratic party of the working class because it has traditionally had a membership base in the working class.

But that is also true of the Australian Army, the majority of whose soldiers are drawn from the working class.  That does not make it the Australian version of the PLA!

The ALP has always been a party of capitalism because it chose the political institution of capitalism, parliament, as the arena for the pursuit of its objectives; and because those objectives, even when expressed through social-democratic values, never went beyond the economic system of capitalism, beyond the reach of a market-driven system of economic activity.

Reform essential to capitalism

“…the Liberal Party have always put the interests of powerful lobby groups ahead of the vulnerable,” asserts Shorten. “That is why they exist –it is what they live for –vested interests.

“By contrast, Labor is the party of change, the party of optimism and opportunity for all.”

But capitalism itself continually revolutionises the conditions of production, its instruments, its technical components and its structural features.  The strongest and most reactionary components of the ruling class are indeed “vested interests” and they are well-represented by conservative parties around the world.

Labor has historically had the role in Australia of adapting the social superstructure of jurisprudence and processes to the latest ways in which the economic laws of capitalism determine the dynamism and resilience of the system.

A component of that has always been to offer working people some small measures of support in return for their compliance with that system.

Often that “support” has been more apparent than real, as for example in recent decades with wage indexation (and discouraging strikes for better pay), the Accord (discouraging strikes in return for social programs), and Enterprise Bargaining (restricting the legally protected scope of strikes, dividing the working class and preventing solidarity actions).

With changes like these, who needs conservatism?

It makes Labor no less a party of capitalism to claim that it is “the party of change, the party of optimism and opportunity for all”.

Why workers need a revolutionary party

The best elements of the working class have always understood that Labor is a party of capitalism.

The most politically advanced sections of the working class have sought out and joined the revolutionary working class party, the Communist Party.

The Communist Party exists to lead the broadest ranks of the people, under the leadership of its living core, the industrial proletariat, to anti-imperialist independence and socialism.

It seeks, even in the most peaceful and non-revolutionary circumstances, to build the existing and ongoing movement for the revolutionary denial of the property rights of the capitalist class and the destruction of their political, ideological and military domination of society.

It exists to prepare the way for the elevation of the working class to a position of rule over the capitalists, over the global institutions and corporations of the world economic system, not through the institution of parliament, but through new institutions that will prevent those overthrown forces from ever staging a come-back.

It challenges the ruling class with immediate demands that are required for the temporary amelioration of the hardships faced by the people, but challenges the people with the realisation that temporary improvement is no substitute for abolishing the cause of hardship – capitalism – once and for all.

Class conscious workers have the choice.

Either, a party which seeks to perpetuate the hardships and injustices of an exploitative system through change and reform, or a party which whilst fighting for immediate demands, plans for the destruction of the system of hardship and social injustice.